CANNABIS BENCHMARKS WEEKLY REPORT — September 7, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED September 7, 2018

U.S. Cannabis Spot Index down 0.8% to $1,108 per pound.

 

The simple average (non-volume weighted) price decreased by $32 to $1,285 per pound, with 68% of transactions (one standard deviation) in the $512 to $2,059 per pound range. The average deal size was nominally unchanged at 4.5 pounds. In grams, the Spot price was $2.44, and the simple average price was $2.83.

 

The relative frequency of trades for outdoor product increased by 1% week-over-week, with that for greenhouse flower experiencing a decline of the same proportion, while indoor product’s share of this metric was flat. Each individual grow type’s share of the total reported weight moved was virtually unchanged compared to last week. Only outdoor flower saw an uptick in its relative volume large enough to be discernible in the chart below; shifts in the relative volumes of warehouse and greenhouse product were negligible.  

 

 

The U.S. Spot Index slipped downward slightly this week, continuing the up-and-down behavior that has been observed since late July. A drop in the volume-weighted price for indoor flower was entirely responsible for the decline in the composite rate. Average deal sizes continued to shrink for the most part and are significantly smaller than those observed in the opening week of 2018, when the average composite transaction volume, and those for warehouse, greenhouse, and outdoor product were documented at 11.6, 8.9, 14.1, and 20.4 pounds, respectively.   

The national volume-weighted prices for flower to be sold to registered patients and general consumers both decreased this week by magnitudes similar to that of the U.S. Spot Index as a whole. In the adult-use realm, small declines in those sectors in California, Colorado, and Washington State worked to push down the national rate. Product in Colorado’s medical cannabis market also experienced a week-over-week downturn, as did the Spot Indices of Illinois and Maine.

March 2019 Forward initially assessed at $1,065 per pound.

 

The average reported forward deal decreased to 61 pounds this week, from 64.5 pounds last week. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 43%, 40%, and 18% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 92 pounds, 42 pounds, and 40 pounds, respectively.

 

The initial assessment of the March 2019 Forward price reflects uncertainty in the California market. This week’s forward observations, and additional feedback from the field, reflect an essentially equal split as to whether prices will increase or decrease in March relative to February. By March, a good proportion of California businesses could be subject to plant and inventory tracking, with incremental administrative costs being passed on to wholesale and retail buyers. Additional upward price pressure in the spring could come from demand growth in the Massachusetts market, although such pressure could also conceivably be minimal given the slow pace of that state’s rollout of its adult-use system.

 

At $1,100 per pound, the October Forward represents a discount of 0.7% relative to the current U.S. Spot Price of $1,108 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

 

 Sample headlines from this week’s Premium Report:

  • California

    After July’s Monthly Composite Price Increased Slightly with New Compliance Requirements, Downward Trend in Monthly Wholesale Rates Resumed in August

  • Colorado

    Despite Numerous Changes to Product Testing Rules in 2018 and Increased Costs to Growers, Monthly Spot Prices Have Trended Downward Consistently This Year

  • Oregon

    State Spot Index Rises for Second Consecutive Week, Behavior Not Observed Since Early April

  • Washington

    Composite Price Slips Slightly This Week, But Still Up Over 10% Compared to Current YTD and Historic Low Observed at the End of July

  • New Mexico

  • Statewide Production Decreases in Q2 for Second Straight Quarter as Patient Purchasing and Wholesale Prices Rise
  •  

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

3 August 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

CANNABIS BENCHMARKS WEEKLY REPORT — AUGUST 31, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED AUGUST 31, 2018

U.S. Cannabis Spot Index up 0.7% to $1,117 per pound.

 

The simple average (non-volume weighted) price decreased by $5 to $1,317 per pound, with 68% of transactions (one standard deviation) in the $537 to $2,097 per pound range. The average deal size declined by 3.7% from 4.7 pounds to 4.5 pounds. In grams, the Spot price was $2.46, and the simple average price was $2.90.

 

The relative frequency of trades for indoor-grown flower decreased by 1% this week, with the entirety of the corresponding increase accruing to transactions involving greenhouse product. Warehouse flower also saw a slight contraction in its share of the total reported weight moved, while the relative volume of outdoor product also declined, by about 2% week-over-week. As a result, greenhouse flower’s share of the total observed volume traded this week was up by over 2% compared to last week.

The national volume-weighted rate for greenhouse flower fell to a historic low for that price assessment, at $924 per pound. Greenhouse product in Washington State saw its going rate this week slip to the lowest ever observed for that grow type in any market, at $644 per pound. California’s Spot Index declined to $1,101 per pound, an all-time low for the Golden State. Alaska’s Spot Index dropped to a year-to-date low of $3,944 per pound this week.   

The histogram below show price dispersion by grow type for August 2018. The proportion of outdoor-grown flower transacting at $400 per pound or less has more than doubled, from 17% in July to 39% in August. The oversupply in Western markets is well-documented, and the perennial objective of selling off inventory ahead of the fall outdoor harvest is expected. The price decline, however, is dramatic, with the August U.S. Spot Price for outdoor-grown flower averaging $676 per pound in 2018 vs. $1,101 in 2017, a 39% decrease.

September Forward closes at $1,150 per pound.

 

The average reported forward deal increased to 64.5 pounds this week, from 57 pounds last week. The increase in forward deal size was driven predominately by forwards in the West for outdoor-grown flower, including deals ranging from 200 to 800 pounds per month. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 40%, 40%, and 20% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 94 pounds, 43 pounds, and 40 pounds, respectively.

 

At $1,150 per pound, the September Forward represents a premium of 2.9% relative to the current U.S. Spot Price of $1,117 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

 Sample headlines from this week’s Premium Report:

  • California

    State Spot Index Stable in Final Week of August, But Monthly Average Composite Price Down 1.4% from July

  • Colorado

    Rise in Wholesale Prices Observed Ahead of Labor Day Weekend in 2017 Not Repeated this Year, as State Spot Index is Stable to Close August

  • Oregon

    Trailing 4-Week Average Composite Price Falls Below That of Washington State for the First Time Since June 2016

  • Washington

    Volume-Weighted Price for Greenhouse Flower Slips to Record Low for Any Market at Less than $650 Per Pound, But Spot Index Rises for Fifth Consecutive Week

  • Nevada

  • Spot Index Declines in June as Total Retail Demand Slips Slightly Month-Over-Month
  •  
  • Illinois
  • New Law Could Result in Increased Demand in State’s Medical Program, Where Wholesale Prices Have Already Been Rising for Most of 2018

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

3 August 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

CANNABIS BENCHMARKS WEEKLY REPORT — AUGUST 24, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED AUGUST 24, 2018

U.S. Cannabis Spot Index down 0.8% to $1,109 per pound.

 

The simple average (non-volume weighted) price decreased by $28 to $1,322 per pound, with 68% of transactions (one standard deviation) in the $537 to $2,107 per pound range. The average deal size declined by 2.3% from 4.8 pounds to 4.7 pounds. In grams, the Spot price was $2.45, and the simple average price was $2.91.

 

National Transaction Stats this week continued the relative stability that has marked most of this summer. The relative frequency of trades for outdoor-grown product expanded slightly, by less than 1% compared to last week, with the corresponding declines not discernible in the chart below. Each grow type’s share of the total reported weight moved nationwide this week was virtually identical to those observed last week.        

The U.S. Spot Index slipped by almost 1% this week to establish a new all-time low for the national composite price, with the overall decline underpinned by dips in the volume-weighted average rates of indoor and outdoor product. Average deal sizes shrank across the board for the second consecutive week. Average volumes of transactions involving greenhouse flower have been the most stable recently, however, despite the persistent declines.   

In addition to the U.S. Spot price falling to establish a new historic low, state-level composite rates in California and Oregon did the same for those markets, declining to $1,102 and $662 per pound, respectively. Additionally, the volume-weighted average price for outdoor flower in Oregon once again sank to a historic low for that grow type in any market, dropping to $371 per pound this week.

The U.S. Cannabis Spot Index

  • Opened 2016 at $2,030 and closed at $1,615, down 20%

  • Opened 2017 at $1,532 and closed at $1,436, down 6%

  • Opened 2018 at $1,503 and closed 24th of August at $1,109, down 26% YTD

 

September Forward unchanged at $1,150 per pound.

 

The average reported forward deal declined more than ten pounds to 57 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 39%, 42%, and 19% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 76 pounds, 48 pounds, and 39 pounds, respectively.

 

At $1,150 per pound, the September Forward represents a premium of 3.7% relative to the current U.S. Spot Price of $1,109 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

 

Sample headlines from this week’s Premium Report:

  • California

    State Spot Index Drops to All-Time Low for California’s Market, Approaching $1,100 Per Pound

  • Colorado

    Over 75% of Reported Volume Traded Sold for $1,000 Per Pound or Below in Recent Weeks

  • Oregon

    State Spot Index Descends Again, Sinking Below $675 Per Pound and Settling Just Above the Current Historic Low for Any Market

  • Washington

    Wholesale Prices Continue to Trend Upward Gradually, As Reports Surface that Some Producers May Be Holding Back Inventory

  • Arizona

  • Strong Sales and Patient Growth Continue in July, Pushing State Spot Index to First Month-Over-Month Rise Thus Far in 2018

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

3 August 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

CANNABIS BENCHMARKS WEEKLY REPORT — AUGUST 17, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED AUGUST 17, 2018

U.S. Cannabis Spot Index up 0.5% to $1,118 per pound.

 

The simple average (non-volume weighted) price increased by $5 to $1,350 per pound, with 68% of transactions (one standard deviation) in the $562 to $2,139 per pound range. The average deal size declined by 6.2% from 5.1 pounds to 4.8 pounds. In grams, the Spot price was $2.47, and the simple average price was $2.98.

The relative frequency of trades involving both indoor and greenhouse-grown flower were observed to decline marginally this week, by less than 1% each. The relative frequency of transactions for outdoor product consequently increased by less than 2%. Greenhouse and outdoor flower both saw their shares of the total reported weight moved expand by 1% each. As a result, warehouse product’s relative volume contracted by 2% week-over-week.        

The U.S. Spot Index ticked upward slightly this week, with increases in the volume-weighted prices for indoor and outdoor flower lifting the overall composite rate. Average deal sizes continued to shrink, although that for greenhouse product was stable for the most part. The mean composite transaction volume for the U.S. as a whole followed last week’s almost 10% decrease with another notable contraction.   

The U.S. volume-weighted rate for greenhouse flower fell to establish another historic low for that grow type on the national level, settling this week at $939 per pound. Oregon’s state Spot Index slipped to an all-time low for that market, while the state’s volume-weighted price for outdoor product this week – $398 per pound – is the lowest ever observed for that grow type in any market. On the other end of the spectrum, warehouse flower in Michigan ascended to a year-to-date high this week of $2,040 per pound.   

September Forward assessed down $50 to $1,150 per pound.

 

The average reported forward deal was just under 68 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 45%, 40%, and 15% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 92 pounds, 55 pounds, and 42 pounds, respectively.

 

At $1,150 per pound, the September Forward represents a premium of 2.8% relative to the current U.S. Spot Price of $1,118 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample headlines from this week’s Premium Report:

  • California

    Current Major Wildfires Reported to Have Small Impact on Wholesale Market, With Forecasted Harvest Season Conditions Favorable for Both a Robust Crop and More Fires

  • Colorado

    Total Retail Sales for June Up Marginally Year-Over-Year, But State Spot Index Slid in that Month Even with Elevated Summer Demand

  • Oregon

    State Spot Index Slips Below $700 Per Pound, Falls Below Washington State’s to Become Lowest in the Country

  • Washington

    Composite Rate Reported to be on the Rise for the Third Consecutive Week

  • Michigan

  • Opening of Licensed Commercial Medical Market Imminent with Testing Labs Recently Approved for State Licenses
  • Volume-Weighted Price for Indoor Flower Ascends to Year-to-Date High

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

3 August 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

CANNABIS BENCHMARKS WEEKLY REPORT — AUGUST 10, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED AUGUST 10, 2018

U.S. Cannabis Spot Index down 1.2% to $1,113 per pound.

 

The simple average (non-volume weighted) price increased by $14 to $1,345 per pound, with 68% of transactions (one standard deviation) in the $577 to $2,133 per pound range. The average deal size declined by 10% from 5.7 pounds to 5.1 pounds. In grams, the Spot price was $2.45, and the simple average price was $2.97.

 

The relative frequency of trades involving greenhouse-grown flower was reported to increase this week, by 2% compared to last week. The resulting decline was split evenly between deals for the other two grow types. However, greenhouse product saw its share of the total documented weight moved shrink slightly, by 1% week-over-week, as did the relative volume of outdoor flower. Consequently, indoor product’s relative volume increased by 2% compared to last week.      

The U.S. Spot Index resumed its negative momentum this week. The national composite price and the volume-weighted averages of all three grow types declined, erasing the modest gains made last week. Average deal sizes also contracted across the board. While shrinking average transaction volumes have been common so far in 2018, the magnitude with which the two sun-fueled grow types saw their average deal sizes decrease this week is notable.  

The national volume-weighted average for product wholesaled in adult-use markets declined marginally this week, as falling prices in Colorado and a drop of over $100 per pound in Oregon overwhelmed upticks in California, Washington, and Nevada. Increases in the medical markets of California, Michigan, Illinois, and Maine lifted the national rate for flower to be sold to registered patients very slightly.  

September Forward unchanged at $1,200 per pound. The average reported forward deal declined 2 pounds to 67 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 45%, 40%, and 15% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 85 pounds, 55 pounds, and 44 pounds, respectively.

At $1,200 per pound, the September Forward represents a premium of 7.9% relative to the current U.S. Spot Price of $1,113 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample headlines from this week’s Premium Report:

  • California
  • Composite Price in the Adult-Use Sector Reported to Jump by Almost 14% Week-Over-Week, But Statewide Greenhouse and Outdoor Rates Slide Downward
  •  
  • Colorado
  • Volume-Weighted Price for Indoor Flower Again Reaches An All-Time Low for Colorado, While Rates for Greenhouse Product Largely Stable
  •  
  • Oregon
  • State Spot Index Plummets to New Historic Low for Oregon, Closing Below $750 Per Pound This Week
  •  
  • Washington
  • Wholesale Prices Climb for Second Straight Week, Recalling 2017’s Pre-Memorial Day Increase
  •  
  • Alaska
  • As of June, Licensed Cultivators Exceeded Total Volume of Flower Sold Wholesale for All of 2017
  •  
  • Illinois
  • Demand Remains Strong in July as Retail Sales Top $10 Million for Fifth Straight Month; But State Spot Index Levels Off as Wholesale Revenues Shrink
  •  
  • Pennsylvania
  • Early Reports of Wholesale Flower Prices Indicate that State’s Medical Cannabis Market is Among the Most Expensive in the Country

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

3 August 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

CANNABIS BENCHMARKS WEEKLY REPORT — AUGUST 3, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED AUGUST 3, 2018

U.S. Cannabis Spot Index up 1.0% to $1,126 per pound. 

The simple average (non-volume weighted) price increased by $5 to $1,331 per pound, with 68% of transactions (one standard deviation) in the $574 to $2,088 per pound range. The average deal size was nominally unchanged at 5.7 pounds. In grams, the Spot price was $2.48, and the simple average price was $2.93.


National Transaction Stats this week maintained the relative stability that has characterized them for most of the summer to this point. The relative frequency of trades for each grow type was essentially unchanged compared to last week. Greenhouse-grown flower’s share of the total reported weight moved nationwide contracted very slightly week-over-week, by about 1%, resulting in marginal upticks in the relative volumes of the other two grow types. Summers in prior years have seen increases in the relative volume of greenhouse product.     

The U.S. Spot Index saw its recent downward slide disrupted this week. A small uptick in the national composite price was underpinned by slight rises in the volume-weighted averages of each individual grow type. Average deal sizes were also fairly stable, although all such metrics were observed to contract somewhat compared to last week. Still, no average transaction volume shrank by more than a tenth of a pound in absolute terms.  

This week’s modest increase in the weekly U.S. Spot was not enough to disrupt the persistent downward trend of its Trailing 4-Week Average. However, the trend lines of some state-level Spot Indices are exhibiting changes in behavior. That of Washington State, which this week is displaying discernible upward momentum for the first time this year, is the most notable. Additionally, the Trailing 4-Week average of California’s composite price appears essentially flat, but is actually off by just a few dollars compared to that which was documented last week. The trend lines of the other major and secondary markets depicted in the chart below generally continued their recent behavior this week. 

February 2019 Forward initially assessed at $1,065 per pound.

The average reported forward deal was 69 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 44%, 40%, and 16% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 90 pounds, 56 pounds, and 44 pounds, respectively.


At $1,200 per pound, the September Forward represents a premium of 6.6% relative to the current U.S. Spot Price of $1,126 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample headlines from this week’s Premium Report:

California

  • Early Data on Results of New Required Testing Show that Only 6% of Batches Are Failing Screenings that Require Product to be Removed from Circulation
  • With Advent of Licensing and Regulation, Severe Wildfire Season Could Have Greater Impact on Wholesale Pricing Than in Prior Years

Colorado

  • Wholesale Pricing Stabilizes Momentarily, Disrupting Downward Slide Extending from Early June, As Required Pesticide Testing is Implemented

Oregon

  • Retail Sales Revenue from Flower Down Marginally in June 2018 compared to June 2017, Despite Volume of Product Sold Increasing Almost 60%

Washington

  • State Spot Index Experiences Largest Increase Observed Thus Far in 2018, But Remains the Lowest in the Country

Nevada

  • Total Retail Sales Up Slightly Month-Over-Month in May, While Tax Collections on Wholesale Trading and State Spot Index Decline 

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

3 August 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

CANNABIS BENCHMARKS WEEKLY REPORT — JULY 27, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED JULY 27, 2018

U.S. Cannabis Spot Index down 2.7% to $1,115 per pound.

The simple average (non-volume weighted) price decreased by $1 to $1,326 per pound, with 68% of transactions (one standard deviation) in the $562 to $2,091 per pound range. The average deal size increased 5.7% to 5.7 pounds from 5.4 pounds. In grams, the Spot price was $2.46, and the simple average price was $2.92.


The relative frequency of trades for both indoor and outdoor-grown flower declined modestly this week, by less than 1% each, with transactions for greenhouse product increasing in frequency by less than 3%. However, outdoor flower’s share of the total reported weight moved nationally expanded slightly, by nearly 2%, with the corresponding contraction taken entirely from the relative volume of warehouse product. Reports from the field state that light-deprivation harvests are still being cut down and have not yet reached market in large volumes.     

The U.S. Spot Index slid downward for the third week in a row, again establishing a new historic low for the national composite price. Just like last week, the volume-weighted rates of all three grow types saw week-over-week declines. However, apart from a marginal decrease in the average deal size for greenhouse flower, average transaction volumes generally saw notable expansions compared to last week, particularly that for outdoor flower. 

The histogram below shows price dispersion by grow type for July 2018 month-to-date. Noteworthy is that we are now observing some transactions for indoor and greenhouse grown flower at or below $400 per pound. Nearly 60% of outdoor grown flower is now transacting at $600 per pound or less, versus 33% for H1 2018. The amount of greenhouse grown flower selling at $800 per pound or less has essentially doubled to 31% in July, from 16% during H1.

August Forward assessed down $25 to close at $1,175 per pound.

The average forward deal increased over 6 pounds to nearly 71 pounds, driven predominately by cultivators of sungrown flower in Western markets seeking to secure cash flow ahead of the fall harvest. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 44%, 41%, and 15% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 92 pounds, 56 pounds, and 48 pounds, respectively.


At $1,175 per pound, the August Forward represents a premium of 4.8% relative to the current U.S. Spot Price of $1,115 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample headlines from this week’s Premium Report:

California

  • Spot Index Falls to Historic Low for State’s Market, Just One Month After Implementation of New Compliance Requirements


Colorado

  • Consistently Falling Wholesale Rates in Recent Weeks Suggest Market Is Not Concerned By New Compulsory Pesticide Testing of Flower and Trim That Begins August 1st  


Oregon

  • Less than 1% of Reported Volume Traded in Each of Last Two Weeks Moved for $2,000 Per Pound or Above


Washington

  • State Spot Index and Volume-Weighted Rates for All Three Grow Types Fall to New Historic Lows for Any Market; This Week’s Composite Price Nearing $650 Per Pound


Massachusetts

  • Medical Cannabis Patient Count and Sales Volume Expand in June as Wait for the Beginning of Adult-Use Sales Continues

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

20 July 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

CANNABIS BENCHMARKS WEEKLY REPORT — JULY 20, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED JULY 20, 2018

U.S. Cannabis Spot Index down 1.0% to $1,146 per pound.

The simple average (non-volume weighted) price increased by $8 to $1,327 per pound, with 68% of transactions (one standard deviation) in the $573 to $2,082 per pound range. The average deal size decreased 3.4% to 5.4 pounds from 5.6 pounds. In grams, the Spot price was $2.53, and the simple average price was $2.93.

The relative frequency of trades for indoor-grown flower increased modestly this week, by less than 2%, with transactions for greenhouse product experiencing a decline of the same proportion. Warehouse flower’s share of the total reported weight moved expanded by 1%, with the corresponding contraction drawn from the relative volume of outdoor-grown product. To this point, an increase in the relative volumes of greenhouse and outdoor flower from summer light-deprivation harvests has not been evident in national Transaction Stats.     

The U.S. Spot Index has declined by 11% since the week ending May 25th, just prior to Memorial Day weekend, a slide driven primarily by falling prices for indoor flower.

Both the U.S. Spot Index and the volume-weighted price for indoor flower fell to historic lows this week, of $1,146 and $1,429 per pound, respectively. Similar to last week, the composite prices of both Colorado and Nevada slid to all-time lows for those markets, of $896 and $1,680 per pound, respectively. Despite Washington State’s Spot Index seeing a marginal uptick, the volume-weighted rates for all three grow types traded in the state sank to historic lows for any market, a phenomenon that has occurred numerous times in recent weeks.   

The chart below illustrates the price erosion witnessed in the largest and most mature markets from Q1 2016 through Q2 2018. As we have reported on regularly, Washington State and Colorado began to experience dramatic wholesale price declines about 18 to 24 months after the launch of their recreational programs, with the former and latter declining 56% and 50%, respectively, for the period analyzed. In contrast, Oregon’s legal cannabis system experienced a steep drop off in wholesale prices just over a year after the first licensed adult-use storefronts opened their doors in Q4 2016.

August Forward assessed down $100 to $1,200 per pound.

The average forward deal increased 3 pounds to 64 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 43%, 41%, and 16% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 78 pounds, 56 pounds, and 48 pounds, respectively.


Monthly Forward prices for the period covered by the current Implied Forward Curve were uniformly assessed down this week. At the moment, potential sources of upward price pressure reported by market participants are few and far between, with the two most consequential for the U.S. Spot identified as the implementation of plant and inventory tracking in California, as well as the beginning of required pesticide testing in Colorado. 

The timing and manner of California’s introduction of compulsory statewide tracking is uncertain, and any wholesale price increases that might be brought about by either of the aforementioned regulatory changes will have to contend with an injection of new supply from summer light-deprivation harvests and the full-term autumn crop. Meanwhile, historically low wholesale prices are persisting in Oregon and Washington State, with little on the horizon in those markets that would suggest notable increases for the remainder of the year. 

Finally, expanding production – including more lower-priced greenhouse cultivation – in Nevada’s adult-use market appears to be more than sufficient to meet current demand. The state’s Spot Index has fallen rapidly in recent weeks. Rules governing the adult-use system allow for a greater number of cultivation licenses to be issued later this year, compared to relatively few opportunities for new retailers to enter the market.     

At $1,200 per pound, the August Forward represents a premium of 4.7% relative to the current U.S. Spot Price of $1,146 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample headlines from this week’s Premium Report:

California

  • Recent Stability of State Spot Index May Belie Upward Pressure on Wholesale Prices from New Compliance Requirements


Colorado

  • Industry Group Director Expects Shortage of Wholesale Plant Material After Required Pesticide Testing Begins in August

Oregon

  • Demand from Adult-Use Consumers Increased in June, But Current Statewide Inventory of Flower and Trim is 60X Greater than Recent Monthly Sales Volume

Washington

  • Volume-Weighted Price for Indoor Flower Slips Below $800 Per Pound, Reaching Historic Low for the Product Type in Any Market

Arizona

  • June Marked Fourth Consecutive Month of Elevated Demand, Causing State Spot Index to Level Off After Declining from January through May

Illinois

  • Wholesale Revenues Spike Almost 20% Month-Over-Month in June as Sales to Patients Reach Record High, Pushing Spot Index Up to Nearly $3,100 Per Pound

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

20 July 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

CANNABIS BENCHMARKS WEEKLY REPORT — JULY 13, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED JULY 13, 2018

U.S. Cannabis Spot Index down 1.3% to $1,157 per pound. 

The simple average (non-volume weighted) price decreased by $31 to $1,319 per pound, with 68% of transactions (one standard deviation) in the $578 to $2,060 per pound range. The average deal size was nominally unchanged at 5.6 pounds. In grams, the Spot price was $2.55, and the simple average price was $2.91.


The relative frequency of trades for indoor-grown flower shrank by 4% week-over-week; that for greenhouse product saw a 3% increase, while transactions involving outdoor flower grew in frequency by 1% compared to last week. The relative volumes of the two sun-fueled grow types also expanded week-over-week, albeit modestly, by just 1% each. As a result, warehouse product’s share of the total documented weight moved nationally contracted by 2% compared to last week.     

The U.S. Spot Index was back on the decline this week after last week’s momentary uptick. A small decrease in the national volume-weighted price for indoor product overwhelmed slight rises in the going rates for greenhouse and outdoor flower to establish a new all-time low national composite price. Average deal sizes on the national level were fairly steady for the most part this week, with trades for greenhouse product experiencing the largest proportional shift.    

The trend line of the U.S. Spot Index continued this week to demonstrate the steady and gradual downswing that has characterized it since the 4/20 holiday. This despite the Trailing 4-Week Average of California’s composite price rising to nearly meet that of the national average in recent weeks. However, the downward pressure exerted by the Spot Indices of the other adult-use markets shown in the chart below has overwhelmed any upward force from California in the weeks around the transition from Q2 to Q3. Meanwhile, wholesale pricing in Michigan continues to trend upward as existing operators with local approval await state licenses, with the possibility of further disruption in the weeks and months to come as the state’s regulated medical market opens and establishes itself. 

August Forward unchanged at $1,300 per pound.

The average forward deal increased 1 pound to 67 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 44%, 41%, and 14% of forward arrangements, respectively. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 77 pounds, 62 pounds, and 48 pounds, respectively.


At $1,300 per pound, the August Forward represents a premium of 12.4% relative to the current U.S. Spot Price of $1,157 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample headlines from this week’s Premium Report:

California

  • State Spot Index Rises Slightly for Third Consecutive Week, Accompanied by Reports of Supply “Bottleneck” at the Lab Testing Level


Colorado

  • Volume-Weighted Price for Warehouse-Grown Flower Slips Below $1,000 Per Pound for the First Time


Oregon

  • State Spot Index Falls Below $900 Per Pound to Establish Another Historic Low for Oregon


Washington

  • Composite Price Steady Week-Over-Week, But Going Rate for Greenhouse Product Continues to Sink and Reaches New All-Time Low for the Grow Type in Any Market


Nevada

  • State Spot Index Sees Sharp Drop for Third Consecutive Week on Increased Relative Volume of Lower-Priced Greenhouse Flower

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

13 July 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved

CANNABIS BENCHMARKS WEEKLY REPORT — JULY 6, 2018

CANNABIS BENCHMARKS WEEKLY REPORT — PUBLISHED JULY 6, 2018

U.S. Cannabis Spot Index up 1.0% to $1,172 per pound.

The simple average (non-volume weighted) price increased by $25 to $1,350 per pound, with 68% of transactions (one standard deviation) in the $574 to $2,216 per pound range. The average deal size decreased 3.7% to 5.6 pounds from 5.8 pounds. In grams, the Spot price was $2.58, and the simple average price was $2.98.


After a couple weeks of small declines, the relative frequency of transactions for indoor flower increased slightly week-over-week, by 1%, with the entirety of the corresponding decrease experienced by trades for greenhouse product. The relative volumes of each individual grow type were flat week-over-week. This signals that summer light-deprivation harvests – which can be categorized as either greenhouse or outdoor flower, depending on the individual operation – have not yet come to market en masse.

The U.S. Spot Index saw its five-week streak of establishing historic lows disrupted this week by a small price rise. The overall increase in the national composite rate was supported by upticks in the volume-weighted averages of each individual grow type. Also disrupted this week was the recent expansion of average deal sizes. After two consecutive weeks of across-the-board increases, average deal sizes contracted this week, as they have done for much of the year to this point.    

The chart below contains the full history of the U.S. Spot Index from April 2015 to today.

January 2019 Forward assessed at $1,165 per pound.

The average forward deal increased nominally to 66 pounds. The proportion of forward deals for outdoor, greenhouse, and indoor-grown flower represented 42%, 42%, and 16% of forward arrangements, respectively, with the number of reported forwards for greenhouse-grown flower on the rise. The average forward deal size for monthly delivery for outdoor, greenhouse, and indoor-grown flower was 76 pounds, 63 pounds, and 47 pounds, respectively.


At $1,300 per pound, the August Forward represents a premium of 10.9% relative to the current U.S. Spot Price of $1,172 per pound. The premium or discount for each Forward price, relative to the U.S. Spot Index, is illustrated in the table below.

Sample headlines from this week’s Premium Report:

 California

  • Wholesale Rates Generally See Modest Upward Movement as New Testing, Packaging, and Labeling Requirements Implemented

Colorado

  • State Spot Index Virtually Flat Week-Over-Week as MED Announces Required Pesticide Testing to Begin August 1st

Oregon

  • State Spot Index Falls to New All-Time Low for Oregon’s Market, Approaching $900 Per Pound

Washington

  • State Spot Index Steady Since Mid-June, Fluctuating Within a Range of Just $8, But Remains the Lowest in the Country by a Large Measure

Nevada

  • State Spot Index Has Trended Downward Consistently in the Wake of 4/20, Now Approaching $1,800 Per Pound for the First Time

Alaska

  • Regulators Propose Changes to Wholesale Tax on Cultivators, Initial Draft Rules Do Not Include Lowering Current Levies

 

Cannabis Benchmarks®, a division of New Leaf Data Services, LLC

6 July 2018.  Copyright © 2018 New Leaf Data Services, LLC.  All rights reserved